As mass production has to be accompanied by mass consumption; mass consumption, in turn, implies a distribution of wealth -- not of existing wealth, but of wealth as it is currently produced -- to provide men with buying power equal to the amount of goods and services offered by the nation's economic machinery.-- Marriner Eccles

The good thing about science is that it's true whether or not you believe in it.-- Neil deGrasse Tyson/2015 (possibly earlier)

There is still a lot of thinking on the right that if big corporations are happy, they're going to take the money they're saving and reinvest it in American workers. In fact they bought back shares, a few gave out bonuses; there's no evidence whatsoever that they[sic] money's been massively poured back into the American worker.-- Marco Rubio (darling of the Right)/2018

08 August 2015

No, They Ain't Worth It

Recently, the usually smart Neil Irwin defended CEO comp in a manner I find puzzling.

...the stewardship of large, complex companies is really important, and anyone who cares about the American economy should want the most capable people in charge of them.

As to why, he says,

There are competing (and not necessarily exclusive) theories as to why executive pay has soared so much.

One is that it reflects self-dealing by corporate boards, mutual back-scratching by corporate elites who overpay one another out of some kind of cultural solidarity.

But then goes on to tell "the other side of the story". Very Pollyanna, that.

Yes, it is a case of a circle jerk. Where's John Stewart when we need him? At least, Maher is back.

On the face of it, stewardship is a reasonable statement. On the other hand, not one study I've seen or seen referenced has found that CEOs make a positive impact.

Across the board, the more CEOs get paid, the worse their companies do over the next three years, according to extensive new research. This is true whether they're CEOs at the highest end of the pay spectrum or the lowest. "The more CEOs are paid, the worse the firm does over the next three years, as far as stock performance and even accounting performance," says one of the authors of the study, Michael Cooper of the University of Utah's David Eccles School of Business.

Or, as I read somewhere (never kept, nor can I yet find, the cite):

If these really capable guys wanted to strut their stuff, they'd take on the basket cases. As it is, a sock puppet could run an American corporation.